Agents & Brokers: FHA Red flags?

[David Dachtera]

Question for Agents / brokers ...

When a prospective buyer asks whether a listing is FHA eligible, what alarms go off in your head?

[Michael Brattelli]

@David Dachtera I wouldn't say alarms go off but the main reasons why people do FHA loans is either low down payment (many investors use this to get in cheap and then refi later) or lower credit. Sometimes people have both low credit and not a lot of cash as well.

Another reason someone may ask is because during FHA appraisals they are looking for peeling paint, structural issues, and many other items that may need to be fixed before closing. You should look into FHA appraisals if there is anything you need to worry about. That being said, I've seen FHA appraisers miss things that were glaringly obvious that should have been flagged.